7 Major Financial Mistakes & How To Avoid Them

7 Major Financial Mistakes & How To Avoid Them

Watch out for these seven mistakes that could cost you big time:

1. Not having an emergency fund. Keep at least three months’ worth of your expenses in an account so you’re not using credit cards to pay for unexpected events, such as a job loss or medical expense.
2. Not having a budget. Take your income minus your fixed expenses, and the difference is what you can spend each month. Track your spending using tools like www.mint.com.
3. Not saving for retirement. Be sure to take advantage of your employer’s retirement savings plan, and open your own retirement savings account.
4. Not paying bills on time. Late payments affect your credit score. Sign up for a free service such as www.manilla.com, which lets you organize your bills in one place and sends you bill pay reminders.
5. Not planning for your children’s education. Consider investing in a 529 education savings plan or look at a program such as www.Upromise.com, which lets you save money for college by purchasing from major online retailers. Also, research scholarship opportunities for your student at www.fastweb.com.
6. Not monitoring your credit history. Get a free credit report every year from the three credit reporting companies by going to www.annualcreditreport.com. Check it for accuracy to ensure you’re not a victim of ID theft or fraud.
7. Not paying down credit card debt before everything else. If your credit card interest is 20% and your mortgage interest is 5%, pay off the credit card debt to avoid paying more in interest over the long term. To see how long it will take to pay off your credit card, use the www.bankrate.com calculator under “credit card”.